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Ava Group FY2021 Results Presentation

Review presentation here

Capital Management Update

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) announced on 17 August 2021 the divestment of its Services Division, Ava Global. Following completion of the divestment and based on current cash balances, the Company is expected to hold circa $57.9 million in cash with no material debt.

As advised to the market, management and the Board of Ava Risk Group (“the Board”) have undertaken a review of the Company’s capital structure and capital management strategies. This review had a key focus on achieving the best return for Ava Risk Group shareholders, and at the same time, ensuring that the Company has an efficient capital structure and flexibility to pursue growth opportunities whilst maintaining its current credit metrics.

Following the completion of the divestment of the Services Division (refer to ASX announcement 17 August 2021 for further details), Ava Risk Group is expected to hold $40.2 million in excess capital. The Board’s intention is to use the excess capital to undertake the following capital management strategies:

  1. Capital Return to Shareholders: $39.2 million (circa 16 cents per share); and
  2. On-Market Buy Back: $1.0 million

The proposed capital return is subject to the Company obtaining a favorable Class Ruling from the Australian Taxation Office (“ATO”) in respect of the classification of the proposed capital return and obtaining shareholder approval. Based on feedback from advisors, the Board expects to be in a position whereby the formal proposal could be put before shareholders for approval at the Annual General Meeting (“AGM”), which is scheduled to be held on Thursday, 28 October 2021. Important details, including a timetable, will be provided in the Notice of Meeting in due course.

Depending on the results of the on-market buy back, and the surplus cash available to the Company, the amount allocated to the buy back may increase over time.

Reasons for the Proposed Return of Capital
The proposed Capital Return is being undertaken to return a portion of the Company’s excess capital equitably and efficiently to shareholders.

The Board has considered various options for returning excess capital to shareholders and determined that     a Capital Return, is the optimal method.

In summary, the Board is satisfied and considers that implementing the proposed Capital Return:

  • will leave the Company well-funded to pursue its strategic goals;
  • demonstrates the Board’s commitment to maintaining a strong and efficient balance sheet; and
  • will not materially prejudice the Company’s ability to pay its creditors, and therefore, is in the best interests of the Company and its shareholders.

ENDS

Approved for release by the Board of Directors.

For further information, please contact:

Investor Enquiries

Vanessa Beresford

Media Enquiries

Alexandra Abeyratne

Citadel-MAGNUS Citadel-MAGNUS
vberesford@citadelmagnus.com aabeyratne@citadelmagnus.com
+61 451 422 892 +61 438 380 057

 About Ava Risk Group
Ava Risk Group is a global leader in providing technologies and services to protect critical assets and infrastructure. Its Technology Division manufactures and markets ‘smart’ fibre optic sensing systems (Future Fibre Technologies) and high security access control and electronic locking products (BQT Solutions). Its Services Division provides secure logistics for high-risk valuables such as banknotes and precious metals (Ava Global Logistics). Its products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

Forward Looking Statements
Information in this release is for general information purposes only. Certain statements in this document regarding the Company’s financial position, business strategy and objectives, contain forward-looking statements (rather than being based on historical or current facts) and as such, are not able to be verified.

All forward-looking statements are based on the current views of the Company’s management as well as reasonable assumptions made by, and information currently available to the Company’s management. Forward-looking statements are inherently uncertain and must be read accordingly. There can be no assurance that some or all of the underlying assumptions will prove to be valid. If assumptions are invalid this is likely to have an impact on the accuracy of the statement itself.

All data presented in this document reflects the current views of the Company with respect to future events. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Forward looking statements are also subject to external matters outside the control of the Company.

To the maximum extent permitted by law, the Company, its officers, employees and agents do not assume any obligation to release any updates or revisions to the information (including any forward-looking statements) in this presentation to reflect any change to expectations or assumptions; and disclaim all responsibility and liability for any loss arising from reliance on this presentation or its content.

Ava Risk Group reports strong FY2021 results

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) announces its results for the year ended 30 June 2021. Key highlights include:

  • Revenue and other income increased by 41% to $65.0m
  • EBITDA improved by 116% to $16.0m
  • NPAT improved by 178% to $13.7m
  • Net operating cash flow increased by 195% to $17.6m
  • Cash as at 30 June 2021 of $17.3m with no debt
  • Announced divestment of Ava Global Logistics for net cash proceeds of US$31.1m
    (~A$42.4m) with expected completion by the end of October 2021

Note: Growth percentages are based on comparing FY2021 to FY2020 results unless otherwise indicated.

Review full announcement, Appendix 4E and FY2021 Annual Report

Ava Risk Group CEO, Rob Broomfield, said: “Since acquiring MaxSec Group in December 2017, Ava Risk Group has been delivering consistent growth and moved into profitability over the past two years. We are really pleased with the crystallisation of value achieved from the Services Division, Ava Global, and the strong net cash return from the divestment – 587% over five years. We are also seeing strong returns from the Technology Division, both in top line growth and operational efficiencies, which is providing us with the capability to execute on future growth initiatives.

“Looking ahead, we are optimistic about our technology businesses – FFT and BQT – which together reported FY2021 revenue of $24.7 million and EBITDA of $8.3 million, up 17% and 64%, respectively. The increased momentum noted in the fourth quarter has continued into the current quarter, and new orders are building on the $4.3 million of FY2021 backlog. In addition to these new orders, we have already received over half of the $1.5 million of contracts expected in FY2021 but delayed. Furthermore, we have a very strong pipeline of sales opportunities in our existing markets, and a growing pipeline in new markets, including our mining conveyor solution Aura IQ.

“Extrapolating this increased momentum, and the recent progress on growth initiatives, as well as the recent senior appointment in the world’s largest security market – Jim Viscardi as VP of the Americas – management is confident of further growth in technology through FY2022.

“Importantly, we are looking beyond FY2022 to fulfil our vision of being a global leader in actionable, intelligent data streams that protect and optimise critical assets – by leveraging our partnerships, growing recurring revenue and leveraging our scalable model. We have a great team behind us, a strong network of partners, an exceptional customer base and ended the year in a robust financial position.”

Notice of FY2021 Result and Conference Call

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) will release its financial results for the year ended 30 June 2021 on Monday, 30 August 2021.

Ava Risk Group is a global leader in risk management services and technologies through Future Fibre Technologies (FFT) and BQT Solutions (BQT) and a provider of international secure logistics services via Ava Global Logistics.

Following the release of the result, CEO Rob Broomfield and CFO Leigh Davis will host a conference call at 11am AEST.

To register for the call, please follow the link below.

Date & Time: Monday 30 August 2021 at 11am AEST

 

Registration link: https://s1.c-conf.com/diamondpass/10015779-hs73nw.html

 For further information, please contact:

Investor Enquiries

Vanessa Beresford

Media Enquiries

Alexandra Abeyratne

Citadel-MAGNUS Citadel-MAGNUS
vberesford@citadelmagnus.com aabeyratne@citadelmagnus.com
+61 451 422 892 +61 438 380 057

About Ava Risk Group

Ava Risk Group is a global leader in providing security technologies and services to protect critical assets and infrastructure. Its Technology Division manufactures and markets ‘smart’ fibre optic sensing systems (Future Fibre Technologies) and high security access control and electronic locking products (BQT Solutions). Its Services Division provides secure logistics for high-risk valuables such as banknotes and precious metals (Ava Global Logistics). Its products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

 

Ava Risk Group to Divest Services Division

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) today confirms that it has entered into a Sale and Purchase Agreement (“SPA”) with TTG Bidco Limited (“Buyer”), an entity backed by funds advised by Phoenix Equity Partners Limited (United Kingdom), to divest its non-core Services Division, Ava Global DMCC-LLC (“Ava Global”) (“Transaction“):

  • Sale price of US$46.4 million (A$63.1 million) with anticipated net cash proceeds of US$31.1 million (A$42.4 million) after closing adjustments, and payment of management incentives and FY2021 accrued bonuses
  • Net cash investment return to Ava Risk Group of circa 587%
  • Expected completion by the end of October 2021
  • Post divestment of Ava Global, Ava Risk Group comprises of leading security technology and sensing solution providers Future Fibre Technologies and BQT Solutions

Ava Risk Group CEO Rob Broomfield said: “We are pleased to crystallise our return on investment from Ava Global by implementing this Transaction. From a peak funding investment of US$5.3 million, Ava Risk Group will have received more than US$36.4 million (A$49.6 million) in cash from our Services Division, a net cash return of some 587% over approximately five years. The sale will allow management to fully focus on the Technology Division, growing recurring revenue and expanding into new markets and applications. An update of our growth strategy and policies around surplus cash will be provided when we report FY2021 results on 30th August.”

On behalf of the Ava Risk Group Board, Chairman David Cronin said, “We congratulate Chris Fergus and his management team at Ava Global for achieving an outstanding result for their stakeholders and wish them the very best in the next phase of their growth journey with the Buyer.”

Review ASX announcement here

Chief Financial Officer Appointment and Resignation

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) today advises that Group Chief Financial Officer & Company Secretary Leigh Davis has resigned and will leave the Company on 3 November 2021. Replacing Mr Davis in November will be Neville Joyce.

Ava Risk Group CEO Rob Broomfield said: “We would like to extend our sincere thanks to Leigh for the significant contribution he has made to Ava Risk Group over the past six years, in particular his management and leadership during the Company’s IPO in 2015 and our merger with MaxSec Group Limited during 2017. We wish him well with his decision to pursue a new career opportunity.”

We are pleased to be welcoming Neville Joyce, currently Senior Vice President Group Chief Financial Officer of Redflex Holdings Limited. In addition to his five years with Redflex, Mr Joyce brings extensive experience in leadership, management and strategic financial analysis having held senior finance positions with Origin and Energy Australia. Mr Joyce holds a Bachelor of Business and is CPA (Australia) qualified.”

On behalf of the Board, Chairman David Cronin thanked Mr Davis for his many years of service and for his contribution to the transformation of Ava Risk Group into the global, profitable company it is today. The Board welcomes Mr Joyce and is looking forward to benefiting from his ASX CFO experience as the Company enters its next phase of globalisation and growth.

ENDS

Approved for release by the Board of Directors.
For further information, please contact:

Investor Enquiries

Vanessa Beresford

Media Enquiries

Alexandra Abeyratne

Citadel-MAGNUS Citadel-MAGNUS
vberesford@citadelmagnus.com aabeyratne@citadelmagnus.com
+61 451 422 892 +61 438 380 057

About Ava Risk Group
Ava Risk Group is a global leader in providing security technologies and services to protect critical assets and infrastructure. Its Technology Division manufactures and markets ‘smart’ fibre optic sensing systems (Future Fibre Technologies) and high security access control and electronic locking products (BQT Solutions). Its Services Division provides secure logistics for high-risk valuables such as banknotes and precious metals (Ava Global Logistics). Its products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

Forward Looking Statements
Information in this release is for general information purposes only. Certain statements in this document regarding the Company’s financial position, business strategy and objectives, contain forward-looking statements (rather than being based on historical or current facts) and as such, are not able to be verified.

All forward-looking statements are based on the current views of the Company’s management as well as reasonable assumptions made by, and information currently available to the Company’s management. Forward-looking statements are inherently uncertain and must be read accordingly. There can be no assurance that some or all of the underlying assumptions will prove to be valid. If assumptions are invalid this is likely to have an impact on the accuracy of the statement itself.

All data presented in this document reflects the current views of the Company with respect to future events. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Forward looking statements are also subject to external matters outside the control of the Company.

To the maximum extent permitted by law, the Company, its officers, employees and agents do not assume any obligation to release any updates or revisions to the information (including any forward-looking statements) in this presentation to reflect any change to expectations or assumptions; and disclaim all responsibility and liability for any loss arising from reliance on this presentation or its content.

FY2021 Trading Update & Outlook

  • Group Revenue forecast of $64.8m, above the guidance of $60-64m provided on 12 May 2021
  • Group EBITDA forecast of $14.8-15.8m, above the guidance of $13-$15m provided on 12 May 2021
  • Group Revenue forecast of $64.8m, up 41% on pcp[1] (FY20 $46.1m)
  • Group EBITDA forecast of $14.8-15.8m, up 100-114% on pcp (FY20 $7.4m)
  • Group EBITDA margin forecast of 23-24% compared to 16% in pcp
  • Strong financial position with consolidated net cash forecast of $17.0m and no debt

NB:  All figures compare 12 months to 30 June unless otherwise indicated; FY21 forecasts are unaudited and in A$m

Ava Risk Group Limited (ASX: AVA) (“Ava Risk Group” or “the Company”) today provides a trading update for the year ended 30 June 2021. FY2021 audited results will be reported on 30 August 2021.

Review FY2021 Trading Update & Outlook

Ava Risk Group CEO Rob Broomfield said: “We are pleased to report forecast FY2021 revenue and EBITDA at the top end of our guidance range, showing strong revenue and profit margin growth. Q4 FY2021 saw substantial growth in revenue and orders due to increased demand for remote services and technology to access devices, upgrades and maintenance support. The strong Q4 performance from the Technology Division was due to a pick-up in sales and orders from delayed COVID-19 deals – providing a solid foundation for FY2022. The Services Division continues to outperform as it has adapted to COVID-19 restrictions to ensure delivery of valuable goods for customers.

[1] Previous corresponding period

AVA Group – Coffee Microcaps Presentation

View the presentation here

Trading Update & FY2021 Outlook

  • Group Revenue of $48.5m for the 9 months to 31 March 2021, up 48.2% on pcp[1]
  • Group Gross Margin of 52% compared to 49% in pcp
  • Group EBITDA of $13.1m, up 138.3% on pcp
  • Group EBITDA margin of 27% compared to 17% in pcp
  • Strong financial position with consolidated net cash of $11.7m cash and no debt
  • Q3 FY2021 affected by COVID-19 and weaker US dollar, partly offset by provision of innovative customer solutions, highlighting Ava Group’s diverse geographic footprint and product portfolio
  • FY2021 Guidance: Group Revenue of $60-64m and Group EBITDA of $13-15m[2] (FY2020: Group Revenue of $46.1m and Group EBITDA of $7.4m).

NB: All figures compare 9 months to 31 March unless otherwise indicated; unaudited financial information (A$m)

Review Trading Update & FY2021 Outlook

Ava Risk Group Limited (ASX: AVA) (“Ava Group” or “the Company”) today provides a trading update for the nine months to 31 March 2021 and FY2021 guidance. Ava Group is a global leader in risk management services and technologies through Future Fibre Technologies (FFT) and BQT Solutions (BQT) and a provider of international secure logistics services via Ava Global Logistics.

Ava Group CEO Rob Broomfield said: “Despite the challenges associated with COVID-19, Ava Group has continued to deliver solid financial results for the nine months to 31 March 2021 highlighting the merits of our diversified business model and world-leading product portfolio. This has allowed us to adapt to rapidly changing circumstances to deliver innovative solutions and effectively manage costs. The strong performance of the Services Division illustrates its growing reputation for excellence and the highly scalable nature of its operations.

During the March quarter, the Technology Division was impacted by ongoing international travel restrictions resulting in delays to a number of major security-related contracts. However, we have a strong pipeline of growth opportunities and are well positioned to take advantage of pent-up demand for our products and services, as vaccination programs are rolled out, and travel returns. Building on the significant milestones achieved this year, we are excited about the FY2022 outlook and the opportunities to provide our customers with the most advanced and affordable security and risk management solutions.”

[1] Previous corresponding period

[2]  FY2021 guidance assumes no change to the exchange rate at 31 March 2021 with A$1 equal to US$0.7592.

Q3 FY2021 Quarterly Activities Report & Appendix 4C

  • Net cash from operating activities of $3.0m in Q3 FY2021 compared to $1.1m in Q3 FY2020
  • Cash receipts of $14.8m in Q3 FY2021, a 66% increase on $9.0m in Q3 FY2020
  • $4.4m in dividends paid on 10 March 2021 related to special dividend of 2cps
  • Strong financial position with consolidated net cash of $11.7m and no debt
  • COVID-19 Update: Continues to affect some areas of our operations but has also created opportunities to deliver innovative solutions to our customers

Review Activities Report & Appendix 4C

Ava Risk Group Limited (ASX: AVA) (“Ava Group” or “the Company”) today provides its quarterly cash flow and activities summary for the period ended 31 March 2021. Ava Group is a global leader in risk management services and technologies through its Future Fibre Technologies (FFT) and BQT Solutions (BQT) divisions and a provider of international secure logistics services via Ava Global.

Ava Group CEO Rob Broomfield said: “Ava Group’s capital light operating model and strategies for delivering positive operating cashflow and EBITDA have resulted in another period of strong growth. Despite the uncertainty caused by COVID-19 in some markets, we have continued to provide our customers with world-leading technologies that ensure the protection and delivery of critical assets. In India, the rollout of our contract with the Ministry of Defence remains on track generating interest from other government agencies and highlighting the merits of our partner model.

We are also excited by the success of our “Proof of Value” trials for our innovative Aura IQ conveyor health monitoring solution which enhances mining safety and performance and represents an important opportunity for future growth. We continue to focus on developing our new multi-year comprehensive maintenance offering, leveraging cross-business opportunities via our strong customer relationships. The Services division continues to perform well growing its share of customer spend and winning new clients as it demonstrates the adaptability of our customer offering in rapidly changing circumstances.”